Up to a million Canadians would struggle to cope with a 1 per cent rise in interest rates with 700,000 at risk from even a 0.25 per cent rise

Canadian inflation data released Wednesday reveals that the cost of living is rising; but that should give the Bank of Canada another reason to maintain interest rates at their current level.

Data from Statistics Canada shows a 2.4% rise for the Consumer Price Index on a year-over-year basis in May, up from a 2.0% increase in April. This was the largest gain since October 2018 and beat expectations for 2.1% according to experts polled by Bloomberg.

Meanwhile, core inflation rose to its highest level since 2012.

The inflation stats “are one reason the Bank of Canada faces less pressure to reverse course and begin easing monetary policy,” according to Josh Nye, a senior economist at Royal Bank of Canada.

Food and durable goods were among the elements leading the widespread gains although consumers paid 3.7% less for gasoline compared with May 2018. Excluding gasoline, the CPI increased 2.7% year over year, up from a 2.3% increase in April.

Prices rose more on a year-over-year basis in seven provinces in May compared with April. In British Columbia (+2.6%) and Saskatchewan (+2.1%), the CPI increased more slowly on an annual basis in May than in April.